Alexandria Ocasio-Cortez: Bellwether, Lightning Rod, Canary

I would think HSR would be targeted mainly for cities within a 2 hour flight of each other, so that it can be "competitive" with those flights.

Define "competitive". Under the current conditions, where fossil fuels are subsidized? It's very difficult for HSR to be competitive outside of the densest routes. Under a regime where carbon is properly taxed and/or HSR is subsidized because it's a net benefit to society, then what's "competitive" changes.

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So that rules out most flyover states? Are there a lot of flights between Chicago and say Houston? Are they within a 2 hour flight?

It's unlikely an HSR network would set out to build a direct Chicago-Houston line. Instead nearby cities would connect and then eventually a Chicago-Houston route would become available through them.

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If the first targets of HSR are within large states or between 2 big cities on the East Coast, you can see why the Midwest wouldn't play along.

There's plenty of red states near enough blue metropolises that I think that they're not going to want to get left out. If you're Iowa or South Dakota, would you really pass on a HSR line to Chicago or MSP? If you're Wyoming, would you say no to a HSR line between SLC and Denver that passes through Cheyenne instead of avoiding Wyoming altogether?

Ugh! Why would it go to Cheyenne (clutches pearls)? The only thing stopping it from being a hell hole is lack of a hole. The route south from Laramie is 1000X prettier.

Same with everything. Don't shoot into amygdalic defense mode when any kind of thing in your life is said to be bad and should maybe be reduced at some point.

Not sure if this was in response to me, but there isn't anything extreme about a vegan diet. The biggest obstacles are peoples' conservative / traditional attitudes about humanity's dominion and entitlements and the virulent and cynical propaganda that defends and preserves those attitudes.

I agree with you about defense mode, but this isn't one of those occasions. It's quite the opposite. The most unemotional and soundly rational choice each of us can make is to be vegan. And for entirely selfish reasons at this point as it's in our own best interests as individuals and as part of a global ecosystem in the throes of an extinction event.

.... Someone mentions "avoid triggering defense mode" and you go on a rant about rationality. If we were rational creatures, we wouldn't have a defense mode. Defence mode is inherently emotional. In fact, this rant seems designed to trigger amydalic defence mode in pretty much every average American.

Same with everything. Don't shoot into amygdalic defense mode when any kind of thing in your life is said to be bad and should maybe be reduced at some point.

Not sure if this was in response to me, but there isn't anything extreme about a vegan diet. The biggest obstacles are peoples' conservative / traditional attitudes about humanity's dominion and entitlements and the virulent and cynical propaganda that defends and preserves those attitudes.

I agree with you about defense mode, but this isn't one of those occasions. It's quite the opposite. The most unemotional and soundly rational choice each of us can make is to be vegan. And for entirely selfish reasons at this point as it's in our own best interests as individuals and as part of a global ecosystem in the throes of an extinction event.

.... Someone mentions "avoid triggering defense mode" and you go on a rant about rationality. If we were rational creatures, we wouldn't have a defense mode. Defence mode is inherently emotional. In fact, this rant seems designed to trigger amydalic defence mode in pretty much every average American.

No, the biggest objectionable thing about a vegan diet is not eating meat. The next most offensive thing is the notion that I would have to stop eating cheese. If other people want to be vegans fine for them but don't ask me to join you unless you've got something *I* would enjoy eating as much as those because it's not going to happen short of you prying it out of my fingers. It's not that there aren't vegan foods I like. I'm a big fan of tempeh and falafel. Love that stuff. I'd eat it three times a week if my wife weren't allergic. But three is not seven and until there's a meat substitute that tastes as good as meat and that my family can actually eat, it's simply not going to happen.

From either perspective, there is plenty in the Green New Deal to make economists nervous. Yes, many approve of government funding for public goods such as infrastructure and education. Some see the sense of embracing second-best solutions to serious problems when the ideal approach is politically untenable. But the Green New Deal largely dispenses with analysis of the costs and benefits of climate policy. It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate benefits will follow. It might chuck growth-throttling tax rises and dangerously high deficits into the bargain as well.Of course, much the same could be said for the New Deal, or indeed the effort to win the second world war. In fact, the criticism of the economic approach to climate change implicit in the Green New Deal is not that it is flawed or politically unrealistic, but that it is a category error, like trying to defeat Hitler with a fascism tax. Climate change is not a market glitch to be fixed through pricing, in this view, but part of a dire social crisis. It is hard to judge such arguments without decades of hindsight. But they seem to be winning, raising the possibility that, for the moment, economists have lost the chance to lead the fight against climate change.

From either perspective, there is plenty in the Green New Deal to make economists nervous. Yes, many approve of government funding for public goods such as infrastructure and education. Some see the sense of embracing second-best solutions to serious problems when the ideal approach is politically untenable. But the Green New Deal largely dispenses with analysis of the costs and benefits of climate policy. It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate benefits will follow. It might chuck growth-throttling tax rises and dangerously high deficits into the bargain as well.Of course, much the same could be said for the New Deal, or indeed the effort to win the second world war. In fact, the criticism of the economic approach to climate change implicit in the Green New Deal is not that it is flawed or politically unrealistic, but that it is a category error, like trying to defeat Hitler with a fascism tax. Climate change is not a market glitch to be fixed through pricing, in this view, but part of a dire social crisis. It is hard to judge such arguments without decades of hindsight. But they seem to be winning, raising the possibility that, for the moment, economists have lost the chance to lead the fight against climate change.

In his 2007 ‘Review of the Stern Review on the Economics of Climate Change’, he mocked Lord Nicolas Stern’s assumption of a low discount rate of 1.4%, suggesting we should instead discount the future by his favourite rate of 6%.

And that mockery succeeded wonderfully. By leveraging the capitalization ritual in the name of profit and glory, Nordhaus managed to not only help investors minimize the apparent cost of climate change, but also win the Economics Nobel Prize as the white knight of nothing less than . . . ‘sustainable global economic growth’! Who says you can’t eat your cake and have it too?

A decade ago, we summarized the Nordhaus racket as follows:

The future of humanity

The all-encompassing role of discounting is most vividly illustrated by recent discussion of environmental change. One key issue is the process of global warming/dimming and what humanity should do about it. Supporters of immediate drastic action, such as Nicholas Stern, argue that there is no time to waste. According to The Economics of Climate Change (2007), the report produced by a review panel that he headed for the British Government, the world should invest heavily in trying to limit climate change: the cost of inaction could amount to a permanent 5–20 per cent reduction in global GDP (p. xv). But this conclusion is by no means obvious. Critics such as William Nordhaus (2007) argue against drastic actions. In their view, the overall cost of climate change may end up being negligible and the investment to avert it a colossal blunder.

The interesting thing about this debate – apart from the fact that it may affect the future of humanity – is that both sides base their argument on the very same model: capitalization. Climate change is likely to have multiple effects – some positive, most negative – and the question is how to discount them to their net present value. Part of the disagreement concerns the eventual consequences and how they should be priced relative to each other and in relation to other social outcomes. But the most heated debate rages over the discount rate. At what rate of return should the damage be capitalized?

One thousand dollars’ worth of environmental damage a hundred years from now, when discounted at 1.4 per cent, has a present value of –$249 (negative since we measure cost). This is the discount rate that led Stern to conclude that climate change would be enormously harmful, and that urgent action was needed. But the same one thousand dollars’ worth of damage, discounted at 6 per cent, has a present value of only –$3. This is the long-term discount rate that Nordhaus likes to use in his computations. It implies that the impact of climate change may end up being minimal, and so should the response be, at least for now.

I wouldn't touch mainstream Economics with a cattle-prod, let alone allow them to set the framework for fighting climate change. This is the "science" that has no place for energy in their models (or when it does, the models still work perfectly in the absence of energy inputs) and does not respect the laws of Thermodynamics.

It is hard to judge such arguments without decades of hindsight. But they seem to be winning, raising the possibility that, for the moment, economists have lost the chance to lead the fight against climate change.

Boy is that ever on the nose. The left were the only ones to regard the issue with any urgency and now the economist is devastated, just devastated that the initiative belongs to them.

Full disclosure, I'm an economist by profession and I share the disgust with how the greybeards and their sycophants completely control what is considered serious. I've been in rooms where dinosaurs-but-big-names are listened to intently about issues they have no business talking about. There is an enormous amount of devotion for famous names and I find it prevents real innovative ideas from making it anywhere close to the mainstream. I see the same dynamic with the reaction to AOC's ideas. The immediate dismissal because she doesn't have a name. She isn't a Very Serious Economist. It's why I liked the article so much.

Full disclosure, I'm an economist by profession and I share the disgust with how the greybeards and their sycophants completely control what is considered serious. I've been in rooms where dinosaurs-but-big-names are listened to intently about issues they have no business talking about. There is an enormous amount of devotion for famous names and I find it prevents real innovative ideas from making it anywhere close to the mainstream. I see the same dynamic with the reaction to AOC's ideas. The immediate dismissal because she doesn't have a name. She isn't a Very Serious Economist. It's why I liked the article so much.

I think another beneficial effect is that you really have to engage with the material to avoid further ceding ground to the left. Should transportation be net zero rather than zero? I'd say so. But if the economist wants to take the view it's an unpriced externality and they're not shouting from the rooftops to force it to be priced they can fuck off. Any discussion of economics that doesn't include climate change is as a matter of definition not a serious discussion.

Full disclosure, I'm an economist by profession and I share the disgust with how the greybeards and their sycophants completely control what is considered serious. I've been in rooms where dinosaurs-but-big-names are listened to intently about issues they have no business talking about. There is an enormous amount of devotion for famous names and I find it prevents real innovative ideas from making it anywhere close to the mainstream. I see the same dynamic with the reaction to AOC's ideas. The immediate dismissal because she doesn't have a name. She isn't a Very Serious Economist. It's why I liked the article so much.

Sure. A major anchor around our feet is that we tend to run everything like it was Game of Thrones.

Full disclosure, I'm an economist by profession and I share the disgust with how the greybeards and their sycophants completely control what is considered serious. I've been in rooms where dinosaurs-but-big-names are listened to intently about issues they have no business talking about. There is an enormous amount of devotion for famous names and I find it prevents real innovative ideas from making it anywhere close to the mainstream.

This is a possibility in all (and reality in at least quite a few) professional fields.

Competitive in the sense of price but also total travel time being comparable, when you consider city center to city center, which for flights would include ground transfers.

As for price, a high volume market like SFO-LAX causes multiple competitors to offer flights, keeping prices down.

SFO-Portland flights wouldn't have as much passengers so not as many flights and ultimately, maybe not enough demand to build an HSR line. Of course they could run that line up all the way to Seattle or even Vancouver BC. That might see enough ridership but it would probably be pretty costly.

The other thing is, there are existing passenger rail service all along the West Coast, on conventional trains. I know the CA HSR project isn't using long sections of existing tracks.

But I think I've heard that SF to LA on HSR would be just over 2.5 hours, though the estimate may be very optimistic:

Quote:

The authority says it can still meet its trip time commitments, though not by much.

Computer simulations conducted earlier this year by the authority, obtained by The Times under a public records act request, show the bullet train is three minutes and 10 seconds inside the legal mandate.

Such a tight margin of error has some disputing whether the rail network will regularly hit that two-hour-40 minute time, in part because the assumptions that went into those simulations are highly optimistic and unproven. The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

Frank Vacca, chief of rail operations for the California High-Speed Rail Authority, says the system will be “fully compliant” with the law and able to make the trip within the time limit in regular operations.

Let's just pad it up to 3-3.5 hours. I think a lot of people would take it assuming comparable pricing as 1-hour flights, since you don't have to travel to and from airports on both ends.

But then lets look at Seattle to San Francisco, which is approximately twice the distance as the distance between SF and LA. So the flight would be 2 hours while HSR would be 6-7 hours.

Even with identical pricing, 6-7 hours for HSR vs. 2 hour flight may rule out a lot of the market.

I think it's a given that a lot of routes won't work without subsidies. Under a comprehensive HSR program, much of the reason for extending a route between SFO, PDX, and SEA would be to serve the communities in between, and overall ridership on that segment may not be at breakeven levels, nor would be direct SFO-PDX-SEA ridership. Instead, the goal should be to subsidize the SFO-PDX-SEA route enough to allow leisure and cost-sensitive fares to justify it, and leave time-sensitive fares to the airlines.

Competitive in the sense of price but also total travel time being comparable, when you consider city center to city center, which for flights would include ground transfers.

As for price, a high volume market like SFO-LAX causes multiple competitors to offer flights, keeping prices down.

SFO-Portland flights wouldn't have as much passengers so not as many flights and ultimately, maybe not enough demand to build an HSR line. Of course they could run that line up all the way to Seattle or even Vancouver BC. That might see enough ridership but it would probably be pretty costly.

The other thing is, there are existing passenger rail service all along the West Coast, on conventional trains. I know the CA HSR project isn't using long sections of existing tracks.

But I think I've heard that SF to LA on HSR would be just over 2.5 hours, though the estimate may be very optimistic:

Quote:

The authority says it can still meet its trip time commitments, though not by much.

Computer simulations conducted earlier this year by the authority, obtained by The Times under a public records act request, show the bullet train is three minutes and 10 seconds inside the legal mandate.

Such a tight margin of error has some disputing whether the rail network will regularly hit that two-hour-40 minute time, in part because the assumptions that went into those simulations are highly optimistic and unproven. The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

Frank Vacca, chief of rail operations for the California High-Speed Rail Authority, says the system will be “fully compliant” with the law and able to make the trip within the time limit in regular operations.

Let's just pad it up to 3-3.5 hours. I think a lot of people would take it assuming comparable pricing as 1-hour flights, since you don't have to travel to and from airports on both ends.

But then lets look at Seattle to San Francisco, which is approximately twice the distance as the distance between SF and LA. So the flight would be 2 hours while HSR would be 6-7 hours.

Even with identical pricing, 6-7 hours for HSR vs. 2 hour flight may rule out a lot of the market.

I think it's a given that a lot of routes won't work without subsidies. Under a comprehensive HSR program, much of the reason for extending a route between SFO, PDX, and SEA would be to serve the communities in between, and overall ridership on that segment may not be at breakeven levels, nor would be direct SFO-PDX-SEA ridership. Instead, the goal should be to subsidize the SFO-PDX-SEA route enough to allow leisure and cost-sensitive fares to justify it, and leave time-sensitive fares to the airlines.

The current Amtrak is already heavily subsidies. I do not know if there are sufficient justification to support all these communities in between (honestly I think western coast transport is fairly well supported compare to mid-land). Would that support new economic activities, is there moral justification to do so?

Japan/China do have high speed train. However, I think they population center is much denser than ours. Our metro area is actually fairly spread out. It is probably a side effect of the car culture.

Competitive in the sense of price but also total travel time being comparable, when you consider city center to city center, which for flights would include ground transfers.

As for price, a high volume market like SFO-LAX causes multiple competitors to offer flights, keeping prices down.

SFO-Portland flights wouldn't have as much passengers so not as many flights and ultimately, maybe not enough demand to build an HSR line. Of course they could run that line up all the way to Seattle or even Vancouver BC. That might see enough ridership but it would probably be pretty costly.

The other thing is, there are existing passenger rail service all along the West Coast, on conventional trains. I know the CA HSR project isn't using long sections of existing tracks.

But I think I've heard that SF to LA on HSR would be just over 2.5 hours, though the estimate may be very optimistic:

Quote:

The authority says it can still meet its trip time commitments, though not by much.

Computer simulations conducted earlier this year by the authority, obtained by The Times under a public records act request, show the bullet train is three minutes and 10 seconds inside the legal mandate.

Such a tight margin of error has some disputing whether the rail network will regularly hit that two-hour-40 minute time, in part because the assumptions that went into those simulations are highly optimistic and unproven. The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

Frank Vacca, chief of rail operations for the California High-Speed Rail Authority, says the system will be “fully compliant” with the law and able to make the trip within the time limit in regular operations.

Let's just pad it up to 3-3.5 hours. I think a lot of people would take it assuming comparable pricing as 1-hour flights, since you don't have to travel to and from airports on both ends.

But then lets look at Seattle to San Francisco, which is approximately twice the distance as the distance between SF and LA. So the flight would be 2 hours while HSR would be 6-7 hours.

Even with identical pricing, 6-7 hours for HSR vs. 2 hour flight may rule out a lot of the market.

I think it's a given that a lot of routes won't work without subsidies. Under a comprehensive HSR program, much of the reason for extending a route between SFO, PDX, and SEA would be to serve the communities in between, and overall ridership on that segment may not be at breakeven levels, nor would be direct SFO-PDX-SEA ridership. Instead, the goal should be to subsidize the SFO-PDX-SEA route enough to allow leisure and cost-sensitive fares to justify it, and leave time-sensitive fares to the airlines.

The current Amtrak is already heavily subsidies. I do not know if there are sufficient justification to support all these communities in between (honestly I think western coast transport is fairly well supported compare to mid-land). Would that support new economic activities, is there moral justification to do so?

Japan/China do have high speed train. However, I think they population center is much denser than ours. Our metro area is actually fairly spread out. It is probably a side effect of the car culture.

The big problem with Amtrak is that they don't own the rail so they don't get priority access to it. In much of the country, the owners of the rail will schedule frate while the Amtrak train just has to wait.

Competitive in the sense of price but also total travel time being comparable, when you consider city center to city center, which for flights would include ground transfers.

As for price, a high volume market like SFO-LAX causes multiple competitors to offer flights, keeping prices down.

SFO-Portland flights wouldn't have as much passengers so not as many flights and ultimately, maybe not enough demand to build an HSR line. Of course they could run that line up all the way to Seattle or even Vancouver BC. That might see enough ridership but it would probably be pretty costly.

The other thing is, there are existing passenger rail service all along the West Coast, on conventional trains. I know the CA HSR project isn't using long sections of existing tracks.

But I think I've heard that SF to LA on HSR would be just over 2.5 hours, though the estimate may be very optimistic:

Quote:

The authority says it can still meet its trip time commitments, though not by much.

Computer simulations conducted earlier this year by the authority, obtained by The Times under a public records act request, show the bullet train is three minutes and 10 seconds inside the legal mandate.

Such a tight margin of error has some disputing whether the rail network will regularly hit that two-hour-40 minute time, in part because the assumptions that went into those simulations are highly optimistic and unproven. The premise hinges on trains operating at higher speeds than virtually all the systems in Asia and Europe; human train operators consistently performing with the precision of a computer model; favorable deals on the use of tracks that the state doesn’t even own; and amicable decisions by federal safety regulators.

Frank Vacca, chief of rail operations for the California High-Speed Rail Authority, says the system will be “fully compliant” with the law and able to make the trip within the time limit in regular operations.

Let's just pad it up to 3-3.5 hours. I think a lot of people would take it assuming comparable pricing as 1-hour flights, since you don't have to travel to and from airports on both ends.

But then lets look at Seattle to San Francisco, which is approximately twice the distance as the distance between SF and LA. So the flight would be 2 hours while HSR would be 6-7 hours.

Even with identical pricing, 6-7 hours for HSR vs. 2 hour flight may rule out a lot of the market.

I think it's a given that a lot of routes won't work without subsidies. Under a comprehensive HSR program, much of the reason for extending a route between SFO, PDX, and SEA would be to serve the communities in between, and overall ridership on that segment may not be at breakeven levels, nor would be direct SFO-PDX-SEA ridership. Instead, the goal should be to subsidize the SFO-PDX-SEA route enough to allow leisure and cost-sensitive fares to justify it, and leave time-sensitive fares to the airlines.

The current Amtrak is already heavily subsidies. I do not know if there are sufficient justification to support all these communities in between (honestly I think western coast transport is fairly well supported compare to mid-land). Would that support new economic activities, is there moral justification to do so?

Japan/China do have high speed train. However, I think they population center is much denser than ours. Our metro area is actually fairly spread out. It is probably a side effect of the car culture.

The big problem with Amtrak is that they don't own the rail so they don't get priority access to it. In much of the country, the owners of the rail will schedule frate while the Amtrak train just has to wait.

Oh, I agree. I am wondering is there a point of supporting rural area with train service or they are simply not worth the cost. If we consider they are worth supporting with Amtrak, then there may be a case for HSR for them as well (not necessary true as HSR probably cost more than Amtrak).

…It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate social benefits will follow.…

Suitably amended, this quote could be about the financialisation of the economy. The finance sector is entirely and explicitly about rent seeking. The only social argument for its existence is that it makes it easier to put capital to productive use. That it has grown to 20% of the US economy is evidence of its failure at its only useful task.

Oh, I agree. I am wondering is there a point of supporting rural area with train service or they are simply not worth the cost. If we consider they are worth supporting with Amtrak, then there may be a case for HSR for them as well (not necessary true as HSR probably cost more than Amtrak).

It might not be worth the cost to run a spur just for the most remote communities, but if they're on the route between two metro areas (such as a SFO-PDX-SEA connector) there'd be benefit to incorporating service for both, especially if say the network is already being extended an hour or so outside of the metro areas to incorporate smaller outlying cities like Redding and Eugene.

…It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate social benefits will follow.…

Suitably amended, this quote could be about the financialisation of the economy. The finance sector is entirely and explicitly about rent seeking. The only social argument for its existence is that it makes it easier to put capital to productive use. That it has grown to 20% of the US economy is evidence of its failure at its only useful task.

Well that's not necessarily a failure but it sure feels like one. One example of a way this could happen is that the economy started at 100 quatloos of which 10 QL were FS. At the end of the period the economy is 50 QL and the FS is still 10 QL so the FS is 20% of the economy. In another scenario you start at 100 quatloos and it doubles in size to 200 QL but the FS grows to 40 QL. The non-financial sector grows to 160 QL so that's still growth and maybe that doubling of the FS was necessary to make that happen.

In short, you have to look at the raw numbers to figure out what's going on. A single figure like percent of the economy just doesn't mean much on its own.

What happened to the non-financial sectors over the same period that the FS doubled?

…It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate social benefits will follow.…

Suitably amended, this quote could be about the financialisation of the economy. The finance sector is entirely and explicitly about rent seeking. The only social argument for its existence is that it makes it easier to put capital to productive use. That it has grown to 20% of the US economy is evidence of its failure at its only useful task.

Well that's not necessarily a failure but it sure feels like one. One example of a way this could happen is that the economy started at 100 quatloos of which 10 QL were FS. At the end of the period the economy is 50 QL and the FS is still 10 QL so the FS is 20% of the economy. In another scenario you start at 100 quatloos and it doubles in size to 200 QL but the FS grows to 40 QL. The non-financial sector grows to 160 QL so that's still growth and maybe that doubling of the FS was necessary to make that happen.

Maybe the percentage growth was necessary, but that's an argument that would have to be made not an assumption to make. It's just as likely that the FS's growth was parasitic, and the economy would have grown to 300QL had the FS's share remained at 10%.

…In short, you have to look at the raw numbers to figure out what's going on. A single figure like percent of the economy just doesn't mean much on its own.…

It does; it's one measure of the efficiency of the economy. That 20% of GDP that goes to financial services is overhead; it's not producing anything of value. The financial sector has become dramatically less efficient at enabling the productive economy.

It does; it's one measure of the efficiency of the economy. That 20% of GDP that goes to financial services is overhead; it's not producing anything of value. The financial sector has become dramatically less efficient at enabling the productive economy.

Yes it's possible that the effect is parasitic but it's also possible (likely, IMO) that it's just diminishing returns.

It does; it's one measure of the efficiency of the economy. That 20% of GDP that goes to financial services is overhead; it's not producing anything of value. The financial sector has become dramatically less efficient at enabling the productive economy.

Yes it's possible that the effect is parasitic but it's also possible (likely, IMO) that it's just diminishing returns.

Which is another way of saying “less efficient”

Edit: Additionally, since the finance sector is fundamentally parasitic - every net dollar going to the finance sector is leaving the productive economy - I'm less skeptical that the net effect has been parasitic.

It does; it's one measure of the efficiency of the economy. That 20% of GDP that goes to financial services is overhead; it's not producing anything of value. The financial sector has become dramatically less efficient at enabling the productive economy.

Yes it's possible that the effect is parasitic but it's also possible (likely, IMO) that it's just diminishing returns.

Which is another way of saying “less efficient”

Edit: Additionally, since the finance sector is fundamentally parasitic - every net dollar going to the finance sector is leaving the productive economy - I'm less skeptical that the net effect has been parasitic.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

You're begging the question by presuming there are any net dollars going to the financial sector.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

You're begging the question by presuming there are any net dollars going to the financial sector.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

This sounds rather like a “pre-currency barter” economic just-so story rather than something that actually happens? When would you have a load of copper ingots without already having a buyer for them? My understanding is that copper mines tend to have longstanding contracts with smelters, which have longstanding contracts with large industrial consumers, and so on.

But also my argument is not that the finance sector is entirely useless, just that it's overhead. I don't think it's likely that we would be as wealthy as we are in an alternate-history where commercial loans, or shared-stock corporations, or insurance never developed. But it is overhead.

In much the same way that a company aims to function with the fewest employees required to do the work, so we should aim to run the economy with the least flow of funds into the finance sector.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

This sounds rather like a “pre-currency barter” economic just-so story rather than something that actually happens? When would you have a load of copper ingots without already having a buyer for them? My understanding is that copper mines tend to have longstanding contracts with smelters, which have longstanding contracts with large industrial consumers, and so on.

But also my argument is not that the finance sector is entirely useless, just that it's overhead. I don't think it's likely that we would be as wealthy as we are in an alternate-history where commercial loans, or shared-stock corporations, or insurance never developed. But it is overhead.

In much the same way that a company aims to function with the fewest employees required to do the work, so we should aim to run the economy with the least flow of funds into the finance sector.

I don't disagree with you entirely. But honestly, who cares if it is overhead. Unlike what most people think, overhead isn't a waste. It is the cost you pay to be able to maintain capability. Over the medium to long term undersupplying overhead costs you in terms of capability and thus efficiency.

Oh, and those contracts have to be negotiated by someone. Where I deploy those negotiating resources is ultimately going to be decided based on the price of copper. If the price is higher in Chicago, and I send my negotiators to New York, I am wasting money. The financial information is still useful, as is the reduced risk provided by certain financial assets (such as abstract copper).

Which doesn't mean that I think that the current allocation of resources to finance is efficient. There is every possibility that it isn't. But, that is a far cry from non-productive or useless. They aren't just rent seeking, there is more going on there.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

This sounds rather like a “pre-currency barter” economic just-so story rather than something that actually happens? When would you have a load of copper ingots without already having a buyer for them? My understanding is that copper mines tend to have longstanding contracts with smelters, which have longstanding contracts with large industrial consumers, and so on.

But also my argument is not that the finance sector is entirely useless, just that it's overhead. I don't think it's likely that we would be as wealthy as we are in an alternate-history where commercial loans, or shared-stock corporations, or insurance never developed. But it is overhead.

In much the same way that a company aims to function with the fewest employees required to do the work, so we should aim to run the economy with the least flow of funds into the finance sector.

I don't disagree with you entirely. But honestly, who cares if it is overhead. Unlike what most people think, overhead isn't a waste. It is the cost you pay to be able to maintain capability. Over the medium to long term undersupplying overhead costs you in terms of capability and thus efficiency.

The problem is not that overhead exists. I've said that it's highly likely that, absent a finance sector, we would all be worse off.

The problem is that the fact that it is overhead is not acknowledged in mainstream politics. The problem is that the growth of the finance sector is treated as a cause for celebration, rather than questioning whether we're getting our monies' worth. Whether devoting a large fraction of our finest minds to the problem of extracting more rents out of stock trading is a sensible use of our talent.

Oh, and those contracts have to be negotiated by someone. Where I deploy those negotiating resources is ultimately going to be decided based on the price of copper. If the price is higher in Chicago, and I send my negotiators to New York, I am wasting money. The financial information is still useful, as is the reduced risk provided by certain financial assets (such as abstract copper).

Which doesn't mean that I think that the current allocation of resources to finance is efficient. There is every possibility that it isn't. But, that is a far cry from non-productive or useless. They aren't just rent seeking, there is more going on there.

And landlords provide valuable access to housing, but they're still rent-seeking.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

You're begging the question by presuming there are any net dollars going to the financial sector.

How do you think all the wealth got to the 1%? They're not 1,000,000x individual contributors.

The problem is that the fact that it is overhead is not acknowledged in mainstream politics. The problem is that the growth of the finance sector is treated as a cause for celebration, rather than questioning whether we're getting our monies' worth. Whether devoting a large fraction of our finest minds to the problem of extracting more rents out of stock trading is a sensible use of our talent.

This. So much this.

Any obscene profits are cause for celebration to that company and a blatant sign of inefficiency in the system for everybody else. Apple's immense profits were good for them, but also a sign that the competition was being ineffective. Their profits suggested they were providing tangible value for their customers, but also there was a lot of value their competitors were failing to provide.

The finance industry doesn't produce anything itself. It is lubrication for everything else. If the finance industry grows out of proportion to the rest of the economy, that's a sign that something is fucked up.

Which question am I begging? That the finance industry is non-productive? The finance industry is, pretty much by definition, non-productive in the sense of producing goods or services for people. The closest they get is services to increase their clients' ability to buy other providers' goods or services.

Although in retrospect I have shifted from raw income to profit by saying every net dollar going to the finance sector is leaving the productive economy.

This isn't strictly true, the finance industry produces financial information, something which can be quite useful and valuable. For instance, if I have a load of copper ingots, and I need to send them somewhere useful, good financial information will determine my ability to do that. If I know that the price for copper is high in Chicago and low in New York, I will be able to make a better decision and that copper will be more usefully consumed.

This sounds rather like a “pre-currency barter” economic just-so story rather than something that actually happens? When would you have a load of copper ingots without already having a buyer for them? My understanding is that copper mines tend to have longstanding contracts with smelters, which have longstanding contracts with large industrial consumers, and so on.

But also my argument is not that the finance sector is entirely useless, just that it's overhead. I don't think it's likely that we would be as wealthy as we are in an alternate-history where commercial loans, or shared-stock corporations, or insurance never developed. But it is overhead.

In much the same way that a company aims to function with the fewest employees required to do the work, so we should aim to run the economy with the least flow of funds into the finance sector.

I don't disagree with you entirely. But honestly, who cares if it is overhead. Unlike what most people think, overhead isn't a waste. It is the cost you pay to be able to maintain capability. Over the medium to long term undersupplying overhead costs you in terms of capability and thus efficiency.

The problem is not that overhead exists. I've said that it's highly likely that, absent a finance sector, we would all be worse off.

The problem is that the fact that it is overhead is not acknowledged in mainstream politics. The problem is that the growth of the finance sector is treated as a cause for celebration, rather than questioning whether we're getting our monies' worth. Whether devoting a large fraction of our finest minds to the problem of extracting more rents out of stock trading is a sensible use of our talent.

Oh, and those contracts have to be negotiated by someone. Where I deploy those negotiating resources is ultimately going to be decided based on the price of copper. If the price is higher in Chicago, and I send my negotiators to New York, I am wasting money. The financial information is still useful, as is the reduced risk provided by certain financial assets (such as abstract copper).

Which doesn't mean that I think that the current allocation of resources to finance is efficient. There is every possibility that it isn't. But, that is a far cry from non-productive or useless. They aren't just rent seeking, there is more going on there.

And landlords provide valuable access to housing, but they're still rent-seeking.

Economically speaking, this isn't really true. To the degree that a landlord provides value, he isn't rent-seeking. For instance, the maintenance he performs and work he does in matching a tenant to an available property isn't rent-seeking (However, this likely isn't the main source of his revenue. Most of that comes from the rent-seeking involved in owning the property). Rent-seeking is specifically when someone collects money without providing any other societal benefit. The financial information and risk control that the financial sector provides means that everything they do isn't rent-seeking. That said, much of what happens in the financial sector is rent seeking. It just isn't everything.

Waiting in line is just a wasteful practice, it's no wonder people have found ways around it. Maybe they can switch to an online ticketing system like Ticketmaster, such that bots can pick up the tickets and sell seats at auction. At least that's more efficient.

Waiting in line is just a wasteful practice, it's no wonder people have found ways around it. Maybe they can switch to an online ticketing system like Ticketmaster, such that bots can pick up the tickets and sell seats at auction. At least that's more efficient.

Lottery selection and forbidding resale would be more in keeping with the intent. or just live stream all of them.

Waiting in line is just a wasteful practice, it's no wonder people have found ways around it. Maybe they can switch to an online ticketing system like Ticketmaster, such that bots can pick up the tickets and sell seats at auction. At least that's more efficient.

Lottery selection and forbidding resale would be more in keeping with the intent. or just live stream all of them.

Waiting in line is just a wasteful practice, it's no wonder people have found ways around it. Maybe they can switch to an online ticketing system like Ticketmaster, such that bots can pick up the tickets and sell seats at auction. At least that's more efficient.

Lottery selection and forbidding resale would be more in keeping with the intent. or just live stream all of them.

They're already being live streamed.

Then lottery selection. Much better than trying more pay-to-play, and will make it harder for lobbyists to game without hiring an army of people just to apply and attend.